Don't Fear Rising Rates

Fixed-income markets have been unsettled since May, when hints by the Federal Reserve of an eventual reduction in quantitative easing triggered an abrupt rise in rates. Although the Fed ultimately decided not to alter their QE program in September – and more importantly, indicated that it will maintain its near-zero policy rate until at least 2016 – confidence in bonds has yet to be fully restored. Many are left wondering what to make of a period where fixed-income returns were generally negative.